It’s no secret that the falling grain prices have taken farm machinery sales down with them. Many industry commentators see this trend impacting much of, if not all of 2015 and possibly carrying over into 2016. At the same time, some observers cite the recent comeback in grain prices as a sign that demand for corn and growing exports of soybeans could be the turnaround U.S. agriculture has been looking for.
Grains staged a comeback during the latter part of the year. According to Colvin & Co.’s Farmland Forecast, grain prices finished at a 5-month high to end the year. March corn prices increased 2.85% throughout December to close at $3.98 per bushel. January soybean prices rose by 0.89% throughout December to close at $10.19, and March wheat prices increased 1.9% throughout December to close at $5.89 per bushel.
In its Jan. 5 Farmland Forecast, Colvin & Co., said it sees some positive signs. “Increasing livestock numbers, rising grain exports and the acceptance of MIR-162 [corn trait] by the Chinese is only a few of the many bullish 2015 demand stories circulating. It is also unrealistic to expect another bumper crop. Since 1980, when a record U.S. corn yield was recorded, the next year has seen an average decrease in yield of 4.4%.”
On the other hand, agricultural lender Rabobank doesn’t see a significant upturn in the near term. It expects corn prices to stay below $4 a bushel, while soybeans slip below $9 per bushel.
In a recent Wall Street Journal report, Morningstar analyst Kwame Webb said he expects crop prices to firm in 2015. “I don’t see 2016 being worse than 2015.”
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